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What changes lie ahead for hospital?

Now that Halifax Regional Health System and Sentara Healthcare have officially closed on the affiliation deal merging the two not-for-profit health care systems, what lies ahead in the future of the local hospital over the next decade?

Both parties signed off on the deal and closed on July 1, with Sentara committing to invest $115 million in capital over the next 10 years.

Sentara plans to invest no less than $4 million a year for 10 years toward routine capital expenditures, such as construction of a medical office building and additions to or construction of a nursing home or clinical service.

And according to the affiliation agreement, Sentara will invest another $75 million over the next 10 years to provide HRH with sufficient financial resources to fund strategic capital projects and services.

The hospital can use that money to hire additional doctors, enter into new services or markets, add new technology and enhance existing capabilities to offer new services, invest in information technology, improve programs and clinical initiatives and to buy more real estate.

Also part of the $75 million — $250,000 — will be contributed to local health care or educational charities the hospital selects.

According to HRH Public Relations Manager Olivia Epps, the hospital already has chosen the recipients of the charitable gifts, but she declined to reveal identities saying it would be announced in coming weeks.

At the first of this month when the deal was closed, the affiliation agreement required Sentara to give HRH $20 million in cash “to provide intermediate term strength to HRH’s balance sheet” and to demonstrate Sentara’s commitment to fund the capital commitment and the replacement and maintenance commitment.

However, upon integration of the Sentara and HRH treasury functions, the balance sheet transfer amount will be remitted to Sentara, according to the written agreement.

 

First signs of change

One of the first signs the public will see acknowledging the affiliation between Sentara and Halifax Regional Hospital will be new signage and logos expected to be unveiled the first of November, according to Epps.

The affiliation agreement between the two hospitals calls for Sentara to have “exclusive authority with respect to use and appearance of all names, logos, symbols, graphic standards, website look and feel, signage and related methods of identification used by members of the HRH Group after the closing date.”

 

Effects on employees

Employees can expect to see no changes in salary or benefits at the hospital for one year following the affiliation, the agreement states.

However, after July 1, 2014, Sentara may adjust salaries of employees consistent with Sentara’s compensation practices and may offer employee benefits through existing Sentara programs.

“To the extent employees transition to Sentara benefits, and to the extent permitted by Sentara’s plans, programs and policies applicable to such benefits, the employees will retain their accrued PTO and extended illness bank benefits and their current seniority with regard to eligibility to participate and vesting in Sentara pay and benefit programs,” according to the agreement.

Any employee whose position is eliminated after July 1 of next year is eligible to participate in the Sentara Priority Retention program and Sentara’s severance policies, it further adds.

Sentara plans to maintain the Halifax Regional Hospital Pension Plan and Long-Term Care Pension Plan through Dec. 31, 2015. However, Sentara may, at any time and in its sole discretion, merge the pension plan with and into Sentara’s defined benefit plan.

If that should happen, the affiliation agreement calls for Sentara to maintain all benefits in accordance with applicable requirements of the pension plan for the period through Dec. 31, 2015.

Halifax Regional Health System is the county’s largest employer employing more than 1,250, with more than 125 doctors comprising the system’s medical staff.

The system encompasses a 192-bed hospital, three long-term care facilities comprising 348 beds including The Woodview and Meadowview Terrace, Halifax Home Health and Halifax Regional Hospice and the Physicians Hospital Enterprise.

Halifax Regional Health System originally announced its plans to affiliate with Sentara in October 2012. The affiliation became effective July 1.